Impacts of the tertiary environment
The Demand Driven System, which since 2012 has seen significant growth nationally in higher education student numbers, has also significantly increased the cost to the Government and the taxpayer. In May 2017, the Minister for Education announced the Higher Education Reform package, which contained a number of measures intended to reduce this cost. The full range of initiatives did not pass through Parliament, and instead the Government has enacted some changes which do not require legislation, with the intention of introducing a new Bill for those remaining initiatives requiring legislation.
The most significant non-legislated change is the capping of Commonwealth Grant Scheme (CGS) funding for bachelorlevel courses in 2018/19 at 2017 levels. While this will have a negative impact on the University's budget, some level of reduction to CGS funding was anticipated and built into budget planning, and the capping of CGS funding is likely to have a less significant impact on the University's budget than the measures initially put forward. At the time of writing, the Government had put to the House of Representatives legislation to implement changes to loan repayment thresholds and indexing, as well as a lifetime limit on HELP loan borrowing.
At the State level, in 2017, a proportion of 'half-cohort' students had completed their undergraduate studies and were moving into postgraduate courses. This 'half-cohort', a smaller group of students that moved through the WA education system as a result of school entry age changes in 2002, entered university in 2015 and had a notable impact on all Western Australian universities due to reduced numbers. This is likely to further affect the supply of students who pursue postgraduate qualifications.
International student recruitment, which has grown significantly faster than State and national trends in the past two years, has been diminished by the State Government's decision in early 2017 to exclude the Perth metropolitan area from the definition of regional Australia for the Regional Sponsored Migration Scheme, a federal program allowing skilled migrants to fill employment vacancies. This change means Perth has become a less appealing study destination for some international students. This is expected to have an impact on 2018 international student recruitment at all Western Australian institutions.
UWA is responding to these challenges by harnessing educational opportunities outside of this limited funding context.
The impact of legislation
Effective as of 1 July 2018, the payroll tax levy in Western Australia will increase by 0.5 per cent for organisations with payroll liabilities of greater than $100 million. The increase will remain in place for a period of five years and will result in a material negative financial impact to the University.
The impact of litigation
There have been no legal proceedings involving the University in 2017, either underway or forthcoming, which could have had a material impact on the University's operations.